Good afternoon. My name is Kathy, and I will be your conference operator today. At this time, I would like to welcome everyone to the LivePerson Second Quarter 2018 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Matthew Kempler, you may begin your call.
Thanks very much. This is Matthew Kempler, VP of Planning and Investor Relations. Joining me on the call today is Robert LoCascio, LivePerson's founder and CEO, and Chris Greiner, our Chief Financial Officer. Please note that during today's call, we will make forward-looking statements, which are predictions, projections, or other statements about future results. These statements are based on our current expectations and assumptions as of today and are subject to risks and uncertainties. Actual results may differ materially due to various factors, including those described in today's earnings release, press release, in the comments made during this conference call, and in 10-Ks, 10-Qs, and other reports we file from time to time with the SEC. We assume no obligation to update any forward-looking statements. Also, during this call, we will discuss certain non-GAAP financial measures.
A reconciliation of GAAP to non-GAAP financial measures is included in today's earnings press release. Both this press release and supplemental slides, which include highlights of the quarter, are available in the investor relations section of LivePerson's website. With that, I will turn the call over to Rob.
Thanks, Matt, and thank you for joining LivePerson's second quarter earnings call. Revenue increased 14% year-over-year to a record $61.7 million in the second quarter. This marks our fifth consecutive quarter of sequential growth and the continuation of our double-digit year-over-year growth trajectory. With a strong first half of the year and a robust pipeline of active opportunities, we're once again raising revenue guidance for 2018. We now forecast revenue in a range of $245.5 million-$247.5 million, up from previous guidance of $239 million-$243 million. Our updated guidance implies year-over-year growth of 13% at the midpoint, demonstrating continued acceleration towards our 20%+ growth target. I will now focus on three important elements that underpin our accelerated performance.
Messaging is rapidly expanding our total addressable market by directly connecting brands to consumers and powering a diverse set of use cases. We now have a great base of referenceable enterprise customers across each key geography and vertical. LivePerson is differentiated as one of the industry's only enterprise-grade offerings that orchestrates the use of machine and human-based agents on a single platform. The front end of conversational commerce are becoming pervasive, enabling consumers to connect with brands from whichever messaging app they prefer. Just today we announced that we are adding WhatsApp as a key participant in LiveEngage ecosystem. With 1.5 billion active users, WhatsApp is an important messaging channel for consumers, which creates more opportunity for LivePerson to grow traffic on our platform. Underpinning LivePerson's record revenue and accelerating growth is a transformation in how consumers communicate with brands.
Messaging with human agents and bots is disrupting the traditional channels that businesses have relied upon, such as calling an 800 number or visiting a website or even downloading a brand's app. With messaging, LivePerson powers an ongoing connection that bridges virtually every conversation between a brand and a consumer across care, sales, marketing, and also retail. By our estimate, this transformation has created nearly $200 billion total addressable market, the vast amount of which is greenfield. The biggest component of the TAM today is derived from offering messaging and bots as superior alternatives to the estimated 270 billion phone calls that are made each year to one 800 numbers. Transforming these calls to messaging is the low-hanging fruit because most people don't want to call the 800 number anymore and be put on hold.
For the brand, LiveEngage typically increases agent productivity by two to four times while meaningfully increasing customer satisfaction. One customer, for example, quadrupled agent productivity in 30 days by using the capabilities of LiveEngage to merge human with automated intelligence. More than 100 large enterprise customers are scaling messaging and bot deployments on LiveEngage. In fact, more than one dozen leading brands have already embedded our software into their interactive voice response systems, or what we call IVRs, so that when you dial an 800 number, instead of waiting on hold, now you can choose to hang up the voice call and switch to messaging instantly. Based on the success of the strategy, we expect to more than double the number of IVR deflection customers by year-end.
Another approach seeing strong adoption has been to embed our messaging software into brands' apps, so that when a consumer opens the app, they see a Message Us button. In the second quarter, one of the largest banks in the world emailed more than 10 million of their consumers announcing they can now message the bank through their app. Messaging volumes for the bank have been doubling each month. We expect them to soon be one of our top 10 customers by volume. While shifting voice calls is our beachhead into the enterprise, over time, we expect an increasing portion of our TAM to come from taking a greater share of the sales and marketing interactions that occur through e-commerce on websites and apps. Unless you're Amazon, the website never really lived up to the promise because at best, only 5% of visitors will convert into paying customers.
With messaging, we have seen conversion rates up to four times higher, while once again driving high agent productivity and customer satisfaction. For example, we built a bot for a major home improvement retailer that is now autonomously selling outdoor grills on their website and driving a meaningful contribution of revenue for the product category. Other customers are placing Apple Business Chat buttons on their website to shift consumers off the web and into messaging. Once a consumer engages through messaging, they have a secure, two-way connection with the brand, and they never need to return back to the website or app. The strength of our advanced platform and deep industry domain expertise are critical differentiators spanning all segments of our business, giving us a sizable lead in the market. I project today we're somewhere between 12 and 18 months ahead of where a competitor would be.
LiveEngage offers brands the power to connect with consumers through whatever messaging interfaces they prefer, SMS, Apple Business Chat, Facebook Messenger, LINE, branded apps, in the IVR system, on the desktop, and mobile apps. We are steadily expanding this reach. Over the last few months alone, we added connections to Google RBM, Alexa, Google Home, and as of today, WhatsApp. LivePerson also has AI and bots front and center as core competencies of its platform. In fact, in June, greater than 40% of messaging conversations on LiveEngage were handled by a bot, which is more than double the attach rate of a year ago. This success is being fueled by the incredible roster of talent and technology that we are developing. In January, you may remember we acquired BotCentral, which provides strong bot authoring tools, agent assist technology, and the expertise to guide enterprise-scale deployments.
In March, we recruited Alex Fanelli, who ran the tech team behind Amazon Alexa, to be our global CTO. Under Alex, we are building out an advanced technology center in Seattle with seasoned engineering, machine learning, and AI talent from world-class companies such as Amazon, eBay, Nike, and Target joining us. In addition to this heavy internal investment, we also work with leading third-party bot and AI companies, including Amazon, IBM, Google, and Microsoft. LiveEngage, the platform, is built on a set of standard application interfaces called APIs, in which the technology groups now at our customers can access conversational data and real-time operational services. When we first released the platform, we did not have many of our APIs exposed because we were still maturing many parts of the platform.
We now have over three dozen APIs available, enabling greater integration into our customers' core backend systems like analytics, contact center operations, billing, and CRM. Use cases are now evolving, with customers using our real-time data API to analyze customer sentiment on the fly and to even evaluate the health of their own core services. This unique combination of a robust platform and an open API stack was a key factor behind one of our existing customers signing a new $30 million multi-year agreement, the largest in the company's history. This customer is delivering messaging experiences through a diverse set of consumer front ends. They're also using our rich set of APIs to manage real-time services within their own operations groups.
As an example, they're using our messaging API to monitor real-time messaging conversations with agents and flagging internal teams if keywords start coming through about service quality on their network. These real-time conversation cues are providing even better data points than their normal network monitoring tools. I had this really clear vision a few years back of how messaging and the conversational commerce space would evolve, and we built LiveEngage as a foundation to go after it at scale. Our execution has positioned LivePerson strategically as where the puck continues to go. I'll wrap up by reinforcing a few key takeaways. First, LiveEngage is allowing us to access new markets. With it, our TAM is rapidly expanding. Second, AI and bots are core competencies of our platform, and we are seeing rapid customer adoption of these parts of our platform.
We will continue to focus our investments here and accelerate our hiring of industry's brightest talent to execute on our overall platform vision. Third, the open nature of our APIs are attracting developers to build their own solutions on top of LiveEngage, which is getting us even deeper into the enterprise. Last, we're just beginning to tap into the potential of this new market. In the fourth quarter of 2017, we announced the largest deal in our history, a $20 million-plus, three-year contract. Just six months later, we set a new record with a $30 million-plus, three-year contract. We are looking forward to what comes next. I will now hand the call over to Chris, who will do a deeper dive on our overall financial outlook. Chris?
Thank you, Rob. Good day to all of you. We delivered another strong quarter, underpinning our growing confidence and improved outlook for the year. The company delivered its second consecutive quarter of mid-teens revenue growth. We generated record average revenue per user of greater than 255,000, up more than 20% year-over-year, and up from 240,000 last quarter. Revenue retention rates, once again, were well above our 100%-plus target. Mobile hit a critical milestone, accounting for approximately 50% of interactions in the second quarter. The number of customers using more than one interaction type on LiveEngage continue to climb, reaching a record 37%. My focus has been on improving operational excellence, and we're making great progress on many fronts in accordance with the priorities I outlined last quarter.
Namely, we're leveraging data to improve execution and decision-making, unlocking insights in areas ranging from customer profitability to sales operations to investment strategies. We're prioritizing for growth through a new organizational framework that invests in go-to-market and technology resources first, thereby strengthening quality, increasing speed, and driving productivity. You can see progress here playing out in our P&L. We're excluding non-recurring items. Our combined R&D and sales and marketing ratios are up 370 basis points year-over-year, while G&A is down 70 basis points. Finally, we're transforming the G&A function by using the same AI technology we provide our customers to generate greater leverage. Overall, the strength of our results is directly correlated to customers adopting messaging and automation strategies in place of voice, websites, and apps. This transformation in how people communicate with brands has opened up a significantly larger total addressable market.
Many exciting wins demonstrate our momentum on this front. As you heard from Rob, we recently signed a customer renewal that resulted in a mid-seven-figure upsell and a record total contract value greater than $30 million. We also signed a low seven-figure deal, multi-year contract with one of the 25 largest banks in the world, and successfully expanded scope with an existing cable company customer in North America just 30 days into a pilot project. Customers are selecting LivePerson due to our depth of expertise, our platform's sophistication and security, our strong references, product vision, broad partner ecosystem, and proven quantifiable ROI use cases. Beyond our direct sales successes, we're seeing our partnerships yield strong results. In partnership with IBM, we won a six-figure contract with one of Europe's largest telcos.
We also signed a formal partnership with Accenture in Europe and quickly secured a six-figure contract with another large telco in the U.K. This was especially gratifying because we won back a customer that had moved off our legacy chat offering a couple of years ago but now saw great strategic value in the conversational commerce capabilities of LiveEngage. With respect to small and mid-sized customers, in May, we launched a new program geared specifically towards making it easier for managed service providers, value-added resellers, and digital agencies to sell LiveEngage. We've seen great success in this effort, and year to date, we have roughly tripled the number of SMB partners working with LiveEngage. LiveEngage's open architecture provides a broader distribution opportunity that allows us to vastly expand our pipeline with these partners and others.
In addition to a distribution ecosystem, LivePerson also continues to strengthen its technological ecosystem, which was most apparent during our second-quarter customer summits, one of which was with Google in San Francisco. Together with Google, we hosted a private briefing to more than 80 customers and prospects and featured customer workshops with Facebook, WhatsApp, Microsoft, IBM Watson, and Apple Business Chat. Ultimately, though, our summits are about creating a stage for our customers and partners to first showcase their success utilizing our platform. Second be references, which helps us progress opportunities to closure. Third, serve as a vehicle for creating new pipelines. An illustration of this is the banking win I described earlier, which closed in the second quarter after attending our first-quarter summit in London.
In fact, in the second quarter alone, nearly $18 million of pipeline was created or influenced on the back of our San Francisco event. With that, I'll turn your attention to a more detailed review of our second-quarter financial results. As mentioned, in the second quarter, revenue increased 14% year-over-year and 5.9% sequentially to $61.7 million, exceeding our guidance range of $59 million-$60 million. Both of our segments delivered double-digit growth, with B2B revenue rising 14% to $56.7 million and consumer revenue rising 11% to $5 million. Total deals signed in the quarter once again increased, driven by the number of new customers added year-over-year. Increased market penetration combined with rising ARPU is a powerful combination, demonstrating our ability to tap into significant white space opportunities.
The telecommunications vertical continued to lead overall growth, increasing 45% year-over-year to 20% of revenue from 16% in the second quarter of last year. Financial services of 20% of revenue and consumer retail of 24% of revenue also delivered double-digit growth. Auto was 11% of revenue, technology 6%, and other 19%. With respect to our geographic revenue distribution, our international operations posted another record, accelerating to 31% year-over-year growth in the second quarter and accounting for 42% of revenue. We made solid inroads in APAC, signing a six-figure deal with one of the leading e-commerce companies in Japan. U.S. revenues were 4% year-over-year and is anticipated to accelerate over the next 12 months as our recently added new logo hunters ramp in productivity.
In fact, we are seeing strong leading indicators of their anticipated impact, with newly created pipeline in the second quarter up 140% compared to a year ago. In addition, nearly half of the attendees at the Google event in San Francisco were prospects, a record mix of new versus existing customers attending our summits. In terms of profit, gross margin increased 200 basis points to 74% in the second quarter from 72% a year ago, meeting our mid-70% long-range target. Adjusted net income, adjusted EBITDA, are non-GAAP measures that exclude $3.7 million or $0.06 per share of expenses in the second quarter of 2018, tied primarily to non-recurring litigation, severance, organizational consulting as we fine-tune the organization around our closer to code and closer to customer framework that I spoke to earlier. You can refer to today's press release for a full reconciliation of GAAP and non-GAAP measures.
At the end of the second quarter, our cash on hand, including restricted cash, was $70 million or approximately $1.15 per share. LivePerson used cash from operations of $1.3 million in the second quarter and spent $5.1 million on capital expenditures. Now let me transition to our improved 2018 outlook. With strong first half results and a robust pipeline of second half opportunities in place, we are raising our revenue guidance for the year to a range of $245.5 million-$247.5 million, up from $239 million-$243 million. At the midpoint of revenue guidance, growth for the year is now 13%, an increase from our previous view of 10%. We're maintaining our adjusted EBITDA range of $22 million-$25 million, as we are seeing a clear payback on our growth investments.
We will continue to prioritize the growth, directing capital towards marketing programs, partners, sales capacity and capability, and product resources that enhance our market position. For the third quarter, we expect revenue of $52 million-$53 million, GAAP net loss per share of $0.12-$0.10, adjusted net income per share of $0.02-$0.03, adjusted EBITDA of $5.1 million-$6.1 million or $0.08-$0.10 per share. For the full year, our expectations are as follows. Revenue of $245.5 million-$247.5 million, GAAP net loss per share of $0.38-$0.32, net income per share of $0.10-$0.14, and adjusted EBITDA of $22 million-$25 million or $0.36-$0.41 per share. You can refer to LivePerson's earnings release issued earlier today for additional details on our full year 2018 assumptions.
In summary, we are winning the conversational commerce market with scaled customers and groundbreaking use cases. We are investing in go-to-market and technology resources to capture the expanding TAM. We are also building the industry's most robust ecosystem, where our technology is the connective tissue for brands to strike new and meaningful relationships with their consumers. Whether it's through Apple Business Chat, Google, WhatsApp, IBM, Accenture, and others, our integrations make it seamless for customers to rapidly pivot and leverage conversational commerce as a competitive differentiator. With that, I'll hand the call back to the operator to take your questions. Operator?
At this time, in order to ask a question, press star followed by the number 1 on your telephone keypad. Again, that is star one. We'll pause for just a moment. Your first question is from Mark Schappel from Benchmark.
Hi. Good evening. Thank you for taking my question. Nice job on the quarter.
Th anks, Mark.
Rob, just starting off with the large $30 million multi-year deal. I was wondering if you could just give us maybe a little bit more color around that deal, maybe who you competed with in that engagement, a little bit more details on the term of the engagement. I don't recall the sector it was in.
It's a U.S. company in the telco area. It's a third contract with this specific company. There was an original contract three years ago, then second one, then this is a long-term, multi-year, three-year deal. That's pretty much it. It's an exciting one, obviously. A lot of opportunity there. It's good that it's off the back, like I said, it's the third one that we've done with them.
Okay, great. Thank you. Also, just a little bit more color on the win-back customer. That seemed like a particularly interesting deal.
Yeah, it's the second one that we've had in the U.K. region. Remember, we had Sky that left us a couple of years ago for chat. They came back. We've done great things with them on the messaging side. There's another telco there that they had a similar situation. They have come back now to get on the messaging on LiveEngage. It's very similar to what we saw with Sky opportunity. It's exciting. They were a great customer when they were a chat customer. They went to a cheaper vendor. Like I said, they've come back. It's a good start. We've done it through a partner, which is also, I think, really important. I think Accenture was part of that because we're shaping a bigger digital transformation deal. We're part of that transformation.
Okay, great. Despite the good quarter, it seemed that the, if I recall correctly from what Chris said, U.S. revenue only grew 4% in the quarter. If I heard that correctly, if you could just talk a little bit about your prospect for the back half of the year for the U.S.
Hey, Mark. Chris here. U.S. revenue up 4%. I'll tell you that if we kind of spanned the globe and looked at where we're most excited about the opportunity, North America, U.S. would be top of the list. It's been an area where we've been continuing to invest. New investments have been placed in that area. I think what we're seeing is just the ramping of those resources. You look at what are the right leading indicators for when we're projecting that growth to accelerate. We said that'll happen in the next 12 months. Pipeline is a great leading indicator. We tried to give you more color on this call related to the pipeline associated with Summits. In North America, we've seen, as you saw, just a significant growth in the amount of pipeline opportunities.
That's being sourced not only from the hunters that we put in place recently, but really focusing on where the white space expansion opportunity is in a lot of our blue-chip accounts. That's untapped opportunity. We've got really powerful proven use cases. We got to go to work with those customers and partner with them closely. That's our focus. We'll get accelerated growth back in the U.S.
Hey, Mark, it's Matt Templer. Just adding in, we're leading in North America also with a lot more pilots in our approach. So you're not necessarily seeing an immediate lift when we go into the customers with a pilot, as they convert, you'll see a subsequent upsell side to it. We highlighted in the call, one of those, that was the North American telco that started with a pilot with us.
Within 30 days, they shifted into an upsell, we got a six-figure contract out of it.
Great, thank you. Just one final question that has to do with cash flow from operations. Historically or traditionally, in the last couple of years, the second quarter has been a very strong cash flow from ops quarter. That wasn't the case this quarter. Chris, if you could just address what was going on there with cash flow.
Yeah. Sure. I think different than history, what you see in play largely is the globalization of our global product and technology groups, specifically the build-out of our Seattle location and the associated investments there. That's primarily where the cash is being deployed right now, and that's different than history. That'll continue through the remainder of this year.
Great. Thank you.
Your next question is from Jeff Van Rhee.
Great. Thank you. Congrats, guys. Maybe circling back to the bookings, obviously, this $30 million three-year deal is notable, as you said, following on the heels of the $20 million. Can you talk beyond that, though, about the breadth and depth? I know you've had a number of comments in the past few quarters, record all-time, record Q1, giving a sense of the depth and breadth of the pipeline. Certainly impressive, this large deal. Talk about the remainder of the bookings and how the quarter fared.
Yeah. The bookings were strong in Q2. Actually, that deal that I mentioned is going to fall in Q3. It closed a week after the quarter. There was another six-figure deal in Q2. Yeah, we had very strong bookings and continue to see good bookings going into Q3 right now. On the heels of that $30 million deal.
Yeah, I think, Jeff, just to give kind of an industry color and some geographic color, we continue to do quite hot in telco. Financial services has a very strong pipeline and is executing, progressing well. International markets was awesome. 31% growth, really strong bookings. We're seeing terrific partner leverage also in Europe. APAC, which is still in its early days of investment and scale-out, had a really exciting win for us in Japan. I think, color-wise, it continued to have the right mix of international and industry exposure. Europe stood out as a highlight. North America, I think we talked about, we like where the pipeline is in North America in terms of what it projects for future bookings quarters.
Mm-hmm. Okay. I guess on the deal count, I think you had caught a few pieces where there were some records, do you have the actual, the new deals? I think you usually give historically new and deals to existing.
Yeah. In total, the number of deals that we signed this quarter was 94. That compares to 91 a quarter ago. What was lumpy this quarter was the existing. Amount of new customers we signed was up for the second straight quarter, over 40%. Our existing customers was down this quarter, but in terms of the first half, it's still up. If you look historically, kind of the sheet I'm looking at, the existing is more lumpy in nature.
Mm-hmm. Okay. It sounds like from an investment standpoint, clearly, Alex and team have been building out, and you commented a couple of times on the spend, both there and in sales. Can you just quantify or maybe dial that in a little more at the extent of expansion in development capacity, expansion in sales capacity? Just sort of to get us in the ballpark of what kind of capacity in both areas you're adding.
Sure. Alex's area, I think if we had it our way, it'd go faster. It's just the talent that we are looking to bring on board is of the highest caliber, and it's scarce. On a run rate basis, you would expect to see our hiring in technology, Matt, correct me if I'm wrong, I want to say, if all went according to plan, around $2 million on a run rate basis. We can verify that for you, Jeff, after the call, I think that's in the neighborhood. In terms of sales and marketing, where we're adding right now is the same areas that we commented on last quarter. I think you'll see, because of the payback we're getting on our marketing programs and our summits, you may see more directed towards programs than people.
In general, right now, it's going towards hunters. It's going towards elements of building out our solution teams. That covers IVR, that covers Apple Business Chat, WhatsApp now through the announcement. Looking at more micro-level programs. I don't think we'll do more large customer summits than we had planned, we might be more micro-focused and selective in certain markets where we see opportunity and go do those as well.
Okay, great. Last one from me, Robert, if I could take you back to that large deal, in terms of. I think the way it was described, it sounded like there were a number of unique aspects to this deal versus the prior iterations, but I was unclear. It sounded like they're using it in a lot of ways, very different maybe than what other customers are using or what they were using your technology before. Can you talk a little bit more about the use cases now versus what you were doing for that telco prior?
Yeah. It's their advancement. If I look at them as a customer, they were one of the first out of the gate, since the third contract. They're obviously in many different front ends from Apple Business Chat to other ones, their apps, web, many that they're pretty much very aggressive on the front end where they're getting traffic. Second part is, I mentioned they're using the APIs that are on the platform to power business operations. They're doing a deeper level of development on the platform and building their own platforms on the platform to use the real-time data sets that come off it to generate intelligence and to get a sense of, once again, I said, like network outages or issues with things that are happening with products that they're selling. We definitely are in an advanced stage.
We have a lot more to go beyond care. Care was sort of the beachhead. There's retail, there's sales, there's many different opportunities. That's why that contract got to that place because of the work we've done over the last three years.
Okay, great. I'll leave it there. Thank you.
Thank you.
You have a question from Ryan MacDonald of Needham & Company.
Hi, guys. Congrats on the great quarter. I guess one question around the U.S. business, I think it was Matt's comment around sort of leading with pilots in that market. Given that focus and starting that some of the success you talked about in the quarter with quick conversions, can you quantify at all, the number of pilots or maybe directionally talk about how that number of pilots has grown over time or recently this year?
Yeah. We're not in a position to give specific guidance. What I'll tell you is this really was born out of an acknowledgement that we want to put our technology against what's in place today. The best way to do that is to get a sample of the population and put it against a control group then prove out the ROI use case. What we're finding is that when we're doing that, we're successful. We're making a very easy tracking process. These are short-term contracts. We're making the pricing attractive. It's all engineered to lead towards a longer-term relationship. Then as that client of ours goes along the journey of conversational commerce, you imagine getting into longer term, more raises tied closer to the value that's being created. That's the design. It's working.
It's going to continue to be a strategy of ours where it makes sense. I think it's a really good innovative approach that the enterprise team came up with.
Just to repeat one of the comments that Chris made earlier, we talked about the pipeline that's being created behind our approach to the market, and we said our pipelines will be created opportunities by our hunters in North America was up 140% year-over-year.
Got it. Just one quick follow-up. In regards to the WhatsApp announcement today, can you talk a little bit about how you compare that opportunity with this integration to what you've seen thus far on Apple Business Chat, Facebook, et cetera, and how this might expand your opportunity from a geographic perspective given the larger number of users internationally on the product?
Yeah, that's really what you're going to see is internationally, India, Europe. Caribbean actually has it a lot. We're rolling out a broadband provider right now in one of those Caribbean countries, uses WhatsApp a lot. Internationally, it's going to allow us to do a lot of things with that. You'll see the launch customers. They'll be predominantly international customers. They're the ones that we'll take live shortly. That's really in South America also. Brazil's a big user of WhatsApp, so there's some stuff down there. That's going to expand that. Obviously, Apple Business Chat and Google RCS Business Messaging are device-level, Android and iOS devices. You're covering most devices on Earth. Those have, I think, a broader implication on adoption in the market. You have Facebook and WhatsApp and LINE and WeChat and others that are apps that are downloadable.
I think still Apple Business Chat and Google Rich Business Messaging are going to have a significant adoption rate in the market because they're on device. You don't have to do anything other than download anything, and they're global.
Got it. Thank you very much.
Thank you.
Thanks.
You have a question from Kevin Liu from B. Riley FBR.
Hi, good afternoon. This is actually Zach coming on for Kevin today. Sticking with the Apple Business Chat theme, can you give us any indication of how many of your customers are live on Apple Business Chat right now? Of the thousands of brands and retailers that have registered for an Apple Business Chat account, what's your sense on how many of those are choosing LivePerson as their launch partner?
Today, there are still just a handful of brands that are on Apple Business Chat. We have about 40% of them are ours. Like you said, there's a lineup to get on there. I think I can't talk so much about it because it's Apple, but they're keeping it pretty controlled, so we get the quality, and we're learning as we get the quality with them. I think we definitely have more brands than anyone else on the platform, and my goal is to continue that, and we'll see how it shakes out. Obviously, I think what's important is that we're back-ending that with a pure messaging asynchronous platform. If you look at what other people are back-ending it with, they're back-ending it predominantly with synchronous chat systems.
Even if you look at the experience of those customers that are on competitive platforms, it's a very different experience. It's session-based. As in, if you stop messaging and you go back, you start over again. With ours, you don't do that. There's no session. It's just an ongoing connection. I think, working with Apple and providing a pure platform to support the enterprise, and small business are going to go live shortly also. I think we're in a strong position there.
Great. That's helpful. For customers like T-Mobile that were already using messaging prior to the launch of Apple Business Chat, has the addition of Apple Business Chat as another channel to engage with consumers had a meaningful increase on the number of interactions, or has it been more of a shift in interactions from, say, their own app to the iMessage interface?
No. I commented a little bit on it. They're a new customer, it's like a new channel. They've had some really good successes with taking consumers off the website. Apple Business Chat has an extension that goes onto your website. You click on it with your mobile device. If you show up, you have an iOS device, you're on their website, you'll be offered a messaging button. You click on it opens Apple Business Chat. They're seeing some very good success there. It's still at its infancy because to get to a brand, T-Mobile or anyone else, you have to put in the brand name when you're searching on Siri or Spotlight Search. You can't yet find a brand by intent. Like, I want to buy a phone, okay, here's T-Mobile.
There's a lot of opportunity, today, it's really, you find a brand. They're finding other unique ways. Obviously, their apps, their websites, other things they're doing can generate a lot more volume, it's a strong start.
Great. That's really helpful. Thanks for taking the question.
We have a question from Mike Latimore of Northland Capital.
Hey, hi. This is Vijay here from Michael Latimore. Congrats on the new win. If you look at the current pipeline, do you think it's any prospect for even larger contracts, and what kind of confidence do you have of winning such larger contracts or even larger?
I think I said this many quarters ago. Somewhere out there's a $100 million deal. I'm not saying it's tomorrow, but if you look at the impact we're having on these organizations and the work we're doing and the transformation we can do, some of these organizations spend over a billion dollars a year on calls in their contact center. You can think about if we can reduce that volume, the cost math by 50%, there's huge savings. I think we're really at the beginning. When you think about it, we're two years into this, and we're doing these this size deal because we've built a platform that allows us to provide that type of value to our customers.
I think there's bigger deals out there, and the deals we're working on, there's definitely deals in the pipeline that are big deals that we're working on.
Okay. Because you have such a large range, how does the deployment timeframe look like?
The good thing is this is a customer going on their third year, they're deployed. There's many more use cases that we will deploy with them. We have a good team that's on that account and working with their internal resources. It's a big opportunity. It's a transformative opportunity for sales, care, retail, and operations. I think that's really the opportunity with them. Once again, they're leading the pack, I think, in many ways, but there's other brands we have that are right behind them on what they want to use the system for.
Okay. Thank you.
Again, in order to ask a question, press star followed by the number 1 on your telephone keypad. You have a question from Koji Ikeda of Oppenheimer.
Hi, this is actually Tyler Page on for Koji. Thank you for taking my questions. Over the last few quarters, the business has clearly shown some improving fundamentals. You can see that in deal commentary, the ARPU gains, your mobile usage, and really in the top-line growth. Can you maybe call out one or two key drivers there and then where you see those key drivers going behind the fundamental strength?
Yeah. I think, look, the biggest driver is in the minds of enterprises today. I don't care if they're a CEO or CMO or chief digital officer or chief care officer. Everyone's thinking about bots, AI, messaging. They're thinking about the transformation of their way in which they are communicating and connecting with their customers. Things like even Amazon Alexa, it's out there, and that's part of conversational commerce. Just in the zeitgeist is conversational commerce, and then how do we power that? Obviously, bots and AI captures the imagination every day of how can we automate those conversations. I think that alone is just driving brands to put their hands up and say, "I'm interested about that." Now, the second thing is tack on that Apple, because Apple Business Chat and Google Rich Business Messaging. You got WhatsApp now.
You have Facebook Messenger. You've got Google Home. You've got Alexa, Amazon Alexa. LINE works with us because we can integrate with them. It's basically all those big companies are out there too, saying, "We think the future of communicating with your customer is through messaging, and we've opened up our systems." To securely provide that to you. I think that's the second part. The third part is, we have customers that we can prove value that are at scale. In the world right now, we are one of the only companies that has that. We're not taking customers live that are doing small little things. They're trying to transform their business, and they trust us because we have referenceable customers.
We have over 100 enterprises right now that are live and that are scaling at some real rate. When you can show that you can remove 40% or 50% of calls out of a contact center and move it onto something else like messaging, and then you can reduce the cost of that by at least 50%, if not more, with automation, you've got sort of a winning formula. I think it's that whole vision of the world and bots, and we're talking to our cars and talking to our homes and our home devices, and then the idea that we can change the way we're communicating and connecting with our customers, and then the ability to show true ROI, that combination is helping us grow our company today.
That's some great color. Thank you very much. Pivoting a little bit to the pipeline, if I can dig in a bit there. When you look at your pipeline, do you still see a lot of low-hanging fruit within the installed base to be harvested, or is this majority of future growth coming from new business at this point?
We're still, if you look at our, by numbers, the majority of the people on LiveEngage are chat customers. It's funny. It's like we have a lot in the base, so there's a lot of activity to move that base, and I think there's a lot of opportunity there. There's also, we've been looking at, we have a slide here of all the verticals and then all the players in the top 100 companies in each vertical, and we have five or 10-
Maximum.
-fraction. We look at that on the greenfield side. There's really an opportunity on both sides of the business. That's really what we're focused on is how do we really get the market shaking. I feel like if everyone knew about what we were doing, I can only wonder what our growth rates would go to, and that's our goal, and that's what Chris was saying. The marketing events are working quite well. Can we do one a month? Can we do these big things one a month? There's a lot of investment that we're looking at to really drive the demand that we know is out in the market today.
I think, and Tyler, I think there's a really important point of color, and I should've maybe mentioned this even more thoroughly. I don't want to give the impression that we're throwing salespeople in the field just to go sell on their own. If anything, we've been very focused recently on building a robust, repeatable training and enablement program for them. We're actually increasing the sophistication of how we look at our accounts. What Rob is speaking of, we've got, if you could picture it in your mind's eye, a grid of every customer the company has, and then what they're buying and what they're not buying. They're not buying is what capabilities exist that the company can offer on our platform.
Being so prescriptive with our install teams on, here's the opportunity, here's how you specifically can go build a template to prove a use case, and pointing them in the direction and helping them along the way in that journey. We're excited about that. Most of that's in North America right now, which is why we're so optimistic on why we'll see really great growth from North America.
Great. Thank you very much. That's all from me.
Thank you.
You have no other questions in queue.
Okay. Thank you for being on the Q2 call. We'll see you next quarter. Have a good night.
Thanks, everybody. Bye.
This concludes today's conference call. You may now disconnect.